OREGON
East Oregonian
A8
Saturday, November 23, 2019
Oregon pension fund is invested in spyware, prison companies
Observers have
called on the state
to divest holdings
By ANDREW SELSKY
Associated Press
TIGARD — Oregon’s
state employee pension fund
is invested in an Israeli com-
pany whose smartphone spy-
ware has been used against
dissidents, human rights
defenders and journalists by
repressive regimes. It’s also
invested in two prison com-
panies that run immigrant
detention facilities, even
though Oregon pioneered
statewide sanctuary status.
Investors around the
globe are increasingly incor-
porating social values like
climate change and human
rights in deciding where to
put their money. Asset man-
agers in the United States
consider such criteria across
$11.6 trillion in assets, rep-
resenting roughly $1 out of
every $4 under professional
management, according to
a 2018 survey by the U.S.
Forum for Sustainable and
Responsible Investment.
Oregon’s situation shows
the practice remains aspi-
rational in even some lib-
eral states, while others have
made strides.
A new initiative in New
York, for instance, allows
its state employee pension
plan, with $210 billion in
assets, to divest from coal
and other sectors with cli-
mate considerations. New
York also decided in July
to sell nearly $10 million
in pension investments in
GEO Group and CoreCivic,
two prison companies that
operate immigrant detention
facilities in California, Flor-
ida, Texas and New Mexico.
GEO Group and Core
Civic also were among 217
companies that Califor-
nia pension fund manag-
ers removed from an index
fund as they sought to mit-
igate risks, fund spokes-
woman Megan White said
in an email.
AP Photo/Andrew Selsky
The Oregon Investment Council conducts its monthly meeting in Tigard. In 2017, the council decided unanimously to invest
$233 million of the state workers’ pension fund in Novalpina Capital, a private equity fund, which later bought into Israeli
spyware company NSO Group. Major international human rights groups said NSO Group’s Pegasus spyware has been used
by repressive governments against human rights defenders, dissidents and journalists.
But $2 million in Ore-
gon’s pension fund remains
invested in the two com-
panies as part of an index
fund, according to the Ore-
gon State Treasury.
“Does this mean (we)
are insensitive to and/or
unconcerned with the var-
ious social and political
challenges? No,” Treasurer
Tobias Read’s offi ce said in
a statement.
Read’s staffers insisted
only the index provider can
determine what’s added
or dropped from the index
and that if Oregon offi cials
intervene, the pension fund
would incur costs that vio-
late the “paramount objec-
tive” of making money.
Some residents, including
Portland attorney Pamela
Quinlan, have advocated for
divestment. Quinlan wrote
to Read on Oct. 30, saying
nothing prevents offi cials
AP Photo/Andrew Selsky
In a nondescript building in an offi ce park in Tigard, the Ore-
gon State Treasury offi ce makes decisions about the invest-
ment of billions of dollars.
from shedding the prison
stocks.
“I feel that owning these
stocks is an insult to many
Oregonians, and an insult to
our values as Oregonians,”
she said in a telephone
interview.
Quinlan also warned
Read that if one of the sev-
eral top Democratic presi-
dential candidates who want
to eliminate private prisons
wins the White House, the
stocks could become worth-
less. The Obama adminis-
tration ordered the Federal
Bureau of Prisons to phase
out private prisons in 2016,
but the Trump administra-
tion reversed that decision.
Meanwhile,
Oregon’s
pension fund has a $233 mil-
lion investment in Noval-
pina Capital that, along with
partners, recently bought
a majority share of NSO
Group, the Israeli spyware
company.
The seeds for Oregon’s
current NSO Group involve-
ment were planted at Oregon
treasury offi ces in a nonde-
script offi ce park in the Port-
land suburb of Tigard.
Stephen Peel and Ste-
fan Kowski, two founding
Novalpina Capital partners,
showed up in November
2017 to make a pitch to the
Oregon Investment Council,
which oversees the state’s
$77 billion pension fund.
Newly created, the Lon-
don-based private equity
fi rm was seeking $1.1 bil-
lion for its debut fund. Pri-
vate equity investments go
into companies that are not
publicly traded on a stock
exchange.
Peel described the Noval-
pina partners’ experience in
Europe and explained their
strategies, according to
an audiotape of the meet-
ing posted on treasury’s
website.
“As
investors,
we
assume we have to be con-
trarian,” Peel told the coun-
cil. “We have to fi nd deals
that other people don’t see
or don’t want to do for vari-
ous reasons.”
After Peel and Kowski
left, a senior investment offi -
cer who had investigated
Novalpina recommended a
$233 million commitment.
The council unanimously
voted yes.
Later, the Alaska Perma-
nent Fund Corporation and
England’s South Yorkshire
Pensions Authority invested
$59 million and $33 million
respectively.
This year, Novalpina
Capital became the focus
of controversy when it and
the founders of NSO Group
acquired a majority stake in
the company from another
private equity fi rm, Fran-
cisco Partners, that the Ore-
gon pension fund had previ-
ously invested in.
Amnesty International
and other rights groups
wrote to Novalpina Cap-
ital, saying NSO Group’s
Pegasus spyware, which
can steal data from smart-
phones and turn them into
eavesdropping devices, tar-
geted at least 24 human
rights defenders, journal-
ists and parliamentarians in
Mexico; an Amnesty Inter-
national employee; and a
human rights campaigner in
the United Arab Emirates.
The spyware also was
implicated in the killing
of Saudi journalist Jamal
Khashoggi, who was dis-
membered in the Saudi con-
sulate in Istanbul last year.
NSO Group has said the
allegations are unfounded.
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